Owning a Franchise In Your Retirement Years
The pros and cons of franchising
Tanya and Hubertus Guenther are in their retirement years, but rather than relaxing they decided to start a new career as owners of 4 Positive Changes Hypnosis Centers (www.positivechanges.com) in the Pacific Northwest. From the beginning they used the business skills they’d picked up in their “real” careers as hoteliers to turn a struggling business into the corporation’s most successful franchise chain. They understand all of the aspects of owning a franchise.
1. “Business in a Box” concept: Great way to start a business with less risk because it is a proven concept, presumably already successful and profitable. Well established product or service. Systems, distribution, pricing, marketing, etc already developed
2. Training usually available (and required) on basics of the business
3. Franchisor can be like an experienced partner – great resource with much
information about key elements of the business that are needed for success.
1. Ongoing cost of franchise fees, royalties, marketing fees.
2. Possibility that marketing and advertising provided may not appear in or benefit all geographic areas
3. Restrictions and restraints- Approvals required for many aspects of change or modifications to product or service. Non-compete clauses that may limit future ventures or business that franchisee would like to pursue
4. Franchise ownership/leadership can change at any time- go in new directions without permission of franchisee
CAUTIONS TO RETIREES
1. Starting and operating any business is a great deal of work, if one wants to be successful. Plan on spending a large amount of time on the business!
2. Always think about how you will exit the business when you want to. Usually easier to get in than to get out of business.
3. What skill set does the retiree really have? Are they enough to carry the successful operation of this new business?
4. How much support will the franchisee really receive from the franchisor and how much will they have to be prepared to provide for themselves?
Is owning a franchise in your retirement years a good idea? It can be if you do your homework and understand the pros and cons of franchising.